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Factors Setting the Tone for Penn National (PENN) Q4 Earnings

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Penn National Gaming, Inc. (PENN - Free Report) is scheduled to report fourth-quarter 2020 results on Feb 4, 2021. In the last reported quarter, the company delivered an earnings surprise of 93.8%.

How Are Estimates Placed?

The Zacks Consensus Estimate for fourth-quarter earnings is pegged at 29 cents, indicating an improvement of 136.3% from a loss of 80 cents reported in the year-ago quarter.

For revenues, the consensus mark is pegged at nearly $1.11 billion, indicating a decline of 17.5% from the prior-year quarter’s figures.

Let's take a look at how things have shaped up in the quarter.

Penn National Gaming, Inc. Price and EPS Surprise

 

Penn National Gaming, Inc. Price and EPS Surprise

Penn National Gaming, Inc. price-eps-surprise | Penn National Gaming, Inc. Quote

 

Factors to Note

Penn National’s fourth-quarter performance is likely to reflect the impact of the coronavirus pandemic. Notably, reduction in gaming capacity combined with pandemic-induced social distancing protocols is likely to have dented the top line in the fourth quarter.

The Zacks Consensus Estimate for the fourth-quarter revenues in Northeast, South, West, and Midwest segment is currently pegged at $527 million, $234 million, $103 million, $225 million, respectively, indicating a decline of 15.1%, 12.7%, 34.8%, and 19.4% from the year-ago quarter’s reported figure. However, the consensus mark for Other segments is pegged at $31.1 million, which indicates growth of 99.6% from the prior-year quarter’s levels.

Nonetheless, increased focus on the development of Barstool Sports betting app, Barstool-branded entertainment destinations, omni-channel distribution strategy and acquisitions of Hollywood Casino, Perryville and Maryland assets is likely to have driven the company’s performance in the to-be-reported quarter. Moreover, solid iCasino revenues are likely to have boosted the top line in the to-be-reported quarter.

What Our Model Says

Our proven model does not conclusively predict an earnings beat for Penn National this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that's not the case here.

Earnings ESP: Penn National has an Earnings ESP of -40.74%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: The company has a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Stocks Poised to Beat Earnings Estimates

Here are some stocks from the Zacks Consumer Discretionary space that investors may consider as our model shows that these have the right combination of elements to post an earnings beat this quarter:

MGM Resorts International (MGM - Free Report) has a Zacks Rank #3 and an Earnings ESP of +3.54%.

Mattel, Inc. (MAT - Free Report) has a Zacks Rank #3 and an Earnings ESP of +9.29%.

Corsair Gaming, Inc. (CRSR - Free Report) has a Zacks Rank #3 and an Earnings ESP of +17.24%.

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